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WORKFORCE PLANNING AND SUCCESSION MANAGEMENT–PLANNING FOR FUTURE CAPABILITY

The capability issues currently facing the APS underpin the need for systematic and effective workforce planning to meet future challenges. The PS Commissioner’s Directions 1999 (clause 2.12) require agency heads to put in place measures directed at ensuring that the agency has at all times the organisational capacity, flexibility and responsiveness necessary to achieve the outcomes expected by the Government or any other authority to which the agency is accountable.

Workforce planning is central to planning for, and actively managing, staff to achieve agency and program outcomes. The ANAO defines such planning as ‘a continuous process of shaping the workforce to ensure that it is capable of delivering organisational objectives now and in the future’.¹¹

The need for APS agencies to actively plan to ensure that their workforces are capable of delivering agency objectives has been stressed by the ANAO and, especially in the context of meeting demographic challenges, by the MAC report Organisational Renewal.¹² In particular, without more careful workforce planning the APS risks losing the experience and corporate knowledge of its older workers, without having sufficiently developed the capability of its younger employees. The MAC report Connecting Government also emphasised the need for workforce planning to ensure that the capabilities necessary for effective whole of government work are in place, including through recruitment and induction, and learning and development activities.¹³

The agency survey results suggest that there has been an increase in the number of agencies undertaking formal workforce planning. The 2004 results show that 41% of agencies have put in place policies, strategies and/or frameworks that aim to ensure they have the skills and capabilities needed for the next 1—5 years, compared to 36% in 2003. This slight increase is, however, less than anticipated, given that the proportion of agencies having indicated in 2003 that they were in the process of developing such policies was 54%. Of these agencies, 63% were still developing their policies and 35% had put relevant policies in place. Although this means that 17 new agencies reported that they now have relevant policies (20% of all agencies), seven agencies that reported they had relevant policies in 2003 now report that they do not, and six had changed their response to ‘being developed’.

Forty-five per cent of agencies this year reported that they are in the process of developing relevant policies. Of these eight per cent (3 agencies) were not developing such policies last year, 77% (30 agencies) were developing such policies last year, and 15% (six agencies) had reported that they had policies in place in 2003.While there may be some definitional confusion among agencies, there also appears to be a sizeable number that have not followed through with their plans in this area. Future State of the Service reports will continue to track whether these agencies put the policies they are developing into practice.

Differences between agencies on the basis of size in relation to formal planning for future skills and capabilities were more marked in 2004, with all the increase in formal policies being in large agencies. A large majority of large agencies (76%) now report having policies, strategies or frameworks in place to ensure they have the skills and capabilities needed for the next 1—5 years. This figure is up substantially from 41% in 2003, and evidence that this group of agencies has recognised the benefits that formal workforce planning can bring. Thirty-seven per cent of medium agencies and 26% of small agencies had put in place relevant policies. For small agencies this represents a decrease on last year’s results: although five new agencies now have policies in place, 10 agencies changed their response from ‘yes’ to ‘no’ or ‘being developed’. The latter group accounts for almost all of the move away from the ‘yes’ response among APS agencies.

The agency survey asked agencies whether they had faced any challenges during 2003—04 in a number of areas of workforce planning.

The most common workforce planning challenge faced by agencies was in accessing adequate information to be able to evaluate the effectiveness of learning and development, identified as a challenge by 60% of agencies. This is consistent with results on the numbers of agencies able to access information on the effectiveness of their learning and development (see below). Also common were challenges in the areas of:

• the ability to plan for changes that are likely to impact on the agency’s business (e.g. technological change, greater cross collaboration with agencies) (identified by 54% of agencies)
• identifying the capabilities required to deliver future workforce needs (45%).

Less common was the challenge of accessing adequate information on the agency’s workforce demographics and characteristics (identified by only 23% of agencies).

All agencies had systems in place to determine the number of non-ongoing employees at any point in time; 83% of relevant agencies had systems in place to determine the number of people employed under legislation other than the PS Act; and 59% of relevant agencies had systems in place to determine the number of people working in the agency employed by labour hire firms, with a further six per cent developing such a system.

Sixty-seven per cent of all agencies had systems in place to determine the number of people in other categories, with a further 10% developing such systems. These systems most commonly related to consultants and contractors.

Workforce planning challenges were more commonly identified by medium and large agencies than small agencies. This may reflect a number of issues including the greater complexity of planning in larger agencies and the difficulty of assembling and analysing information when dealing with a large number of employees in sometimes decentralised operating environments.

There are a variety of measures that agencies can put in place as part of a workforce planning process to meet their identified workforce challenges. The agency survey asked agencies to identify which measures they had in place in 2003—04. Most measures were already in place in most agencies, with other agencies developing the measures.

The most common measure, reported by 71% of agencies, was aligning performance management systems with identified workforce requirements. A further 22% of agencies were developing this measure. The prevalence of this measure is encouraging, indicating that many agencies have recognised the need to link broad business requirements with the development needs of individuals. Other widely used measures included:

• measures to attract and retain people with critical skills (e.g. enhanced and/or more flexible pay and conditions, and development opportunities) (69% of agencies, with a further 20% developing this measure)
• recruitment strategies aligned with identified workforce requirements (60%, with a further 32% developing this measure)
• learning and development strategies aligned with identified workforce requirements (59%, with a further 32% developing this measure).

The widespread use of targeted measures to attract and retain people with critical skills, in particular, is consistent with the efforts of many agencies to position themselves as ‘employers of choice’, and with efforts to ensure that flexible practices are in place that encourage older workers to stay in the workforce.

Succession management strategies linked to future workforce needs are not yet widely used, but the results suggest that a larger number of agencies are working on putting such policies into place. Twenty-two per cent of agencies reported using them now, and another 44% were developing them.

Large agencies were more likely than other agencies to use most of the measures to deal with workforce challenges included in the survey, including learning and development strategies and performance management systems aligned with identified workforce requirements, succession management strategies, and measures to attract and retain people with critical skills. Nonetheless, over half of all small and medium agencies use each of these measures other than succession management strategies. It also needs to be recognised that smaller agencies may be implementing more informally some of the measures that larger agencies include as part of a formal workforce planning process. One small agency made comments along this line.

Due to small agency size, much can be done at a strategic level, without using formal systems.

As well as being asked about measures to address workforce challenges in general, including succession management strategies, agencies were also asked specifically about whether they had a formal approach to succession management. Only 20% of agencies indicated that they had such an approach. This compared to four per cent of agencies last year who stated that they had a ‘formal succession plan’, although some of this increase is likely to reflect the changed wording of the question. Formal approaches to succession management were more common among large agencies (43%) than medium agencies (19%) or small agencies (8%).

However, the survey results continue to suggest that many agencies are planning for succession in a more informal way.¹⁴ Over 70% of agencies indicated that their agency identified potential leaders through manager/agency head identification for all classification groups (APS, EL and SES), with the manager/agency head role strongest at the EL levels, the feeder group to the SES (used by 94% of agencies). Over half of all agencies reported individuals self identifying as a method of identifying potential leaders for each classification group. The performance management system and development opportunities (e.g. mobility, study awards, participation on taskforces) were also commonly used (ranging from 49% of agencies for the SES to 67% for EL employees for performance management, and 53% for the SES to 78% for EL employees for development opportunities). Career development assessment centres and leadership development programs were most commonly used at the EL levels (28% for assessment centres and 59% for leadership development programs) and were more common in large agencies (62% of large agencies use assessment centres and 90% use leadership development programs at the EL levels).

The results confirm the picture emerging last year of growing recognition among agencies of the need to plan for future skill and capability needs and for succession management. Some agencies still need to follow through on the preliminary work they have undertaken. Large agencies are more likely to have put in place formal workforce plans than smaller agencies, but smaller agencies appear to be implementing a number of relevant strategies on a more informal basis. The experience of some smaller agencies such as the ACC, often working in collaboration with other organisations such as the APS Commission, suggests that small and medium agencies can implement a more formal approach, and that there are innovative ways that small agencies can approach workforce planning in a less resource-intensive way.

To assist agencies in workforce planning, the APS Commission has developed the Australian Public Service Employment Database Internet Interface (APSEDII). This is a new facility which provides internet based access to APSED, an important source of information on APS workforce trends. HR managers are able to extract customised tables providing a demographic profile of staff in their agency, as well as APS averages for benchmarking. Data items include age, length of service, employment status, sex, EEO group and location. The data can be shown in both tables and charts that can be downloaded and manipulated in other applications such as Excel. Agency-specific individual records are confidential to the particular agency, with general users only having access to confidentialised data groupings. APSEDII can be accessed at <https://www.apsedii.gov.au> or by following links on the Commission’s website at <http://www.apsc.gov.au.>

11 ANAO, Managing People for Business Outcomes, Year Two, Performance Audit Report No.50, June 2003, <http://www.anao.gov.au>

12 MAC, 2003, op. cit.

13 MAC, 2004, op. cit.

14 2003 results are not directly comparable with 2004 results because of changes in the relevant questions. However, 2003 results also showed that many agencies were planning for succession in a more informal way.